Profit tracker: Pork producer margins lose ground

Pork producer margins lost another $7.41 per head for the week ending on Nov. 2, compared to the week before. Meanwhile for the same week, packer margins improved by 57 cents per head.

Farrow-to-finish producers averaged a $9.37-per-head loss on the week, according to Sterling Marketing, Vale, Ore. That compares to the previous week when producer margins were in the red by just $1.96 per head. One year ago, producers were making a $18.43-per-head profit on average in early November.

Feed costs have generally stabilized in the last few weeks, holding around $134 for hogs placed into finishing; a year ago, that cost was $103.14.

Hog slaughter continues its strong seasonal run, although weights continue light. Hog prices for the week of Nov. 2, were down slightly at $82.26 per hundredweight compared with the week before at $84.59 based on western Corn Belt negotiated lean-carcass bids.

Packer profits inched up slightly, reported at $2.84 per head, compared to $2.27 the week before. Sterling Marketing reports that for early November in 2011, packers were averaging a profit of $9.27 per head.

Cattle feedlot losses have been fluctuating, but showed an improvement for the week ending on Nov. 3. Average margins were reported at $32.68 per head, compared with $56.64 for the week before and a $34.82-per-head profit for the same period in 2011.

Declines in boxed beef prices and steady cash fed cattle prices last week caused packer margins dropped by more than $30 per head. Sterling Marketing reports beef packers lost $76.48 per head for the week ending Nov. 3. One week before, losses were $45.46 per head and one year ago they averaged $55.18.